The U.S. advertising business is entering an uncertain economic environment as the possibility of tariffs, reduced tourism and other factors set to cause the stateside ad market to slow down in 2025, according to Magnas spring 2025s forecast.

The media intelligence firm expects ad revenues for traditional media owners (exclusive cyclical ads like politics advertising) to decline by 1 percent compared to last year. That includes a 5.9 percent decline in linear TV and a 3.7 percent decline in local TV, offset somewhat by a 14.3 percent gain in streaming TV, as that market matures. Traditional media owners are more vulnerable in an uncertain environment, MAGNA notes, as buyers shift spend to lower funnel channels and toward platforms that can deliver on near-term KPIs.

Across all media, ad revenues are expected to rise 4.3 percent (6.7 percent for the year excluding cyclical), down from the prior estimate of 4.9 percent. The overwhelming majority of that growth is from social media and search.

In 2024, U.S. advertising sales reached $380 billion, reflecting a +12.4 percent increase (+9.9 percent excluding cyclical spending).

2025, however, is off to a rocky start, with downward prices on stock markets, bird flu outbreaks causing egg shortages, the risk of trade wars impacting supply chains, among other issues.

The combination of a strong, stable economy and ongoing media/advertising innovation drove record ad spend growth in 2024, said Vincent Ltang, executive VP of global market intelligence at MAGNA, in a statement. Innovation will continue into 2025, and most economic fundamentals remain healthy. However, confidence plays a crucial role in marketing and advertising investment decisions. The current hopefully temporary dip in confidence has already dampened the dynamics of the ad market, prompting U.S. to revise our growth forecast for 2025. While total ad spend is still expected to grow in the mid-single digits, digital media ad sales will continue to experience high-single-digit growth. In contrast, most traditional media channels may face stagnating ad revenues this year.